Tenant’s land rental market participation from rural Ethiopia: A Double Hurdle Model
DOI:
https://doi.org/10.71624/562wcs88Keywords:
Tenant, Land use efficiency, Double hurdle, Tigray, EthiopiaAbstract
This study examines the determinants of smallholder farmers’ participation in land rental markets from the demand side in Tigray Regional State, northern Ethiopia. It draws on cross-sectional data collected during the 2018/19 cropping season from 8,146 smallholder farm households selected using a stratified random sampling technique. A double-hurdle model was employed to distinguish between the decision to participate in the land rental market and the intensity of participation, measured by the area of land rented in hectares. The results show that 19.2% of sampled households participated as tenants, while 29.8% participated as landlords; the majority were self-operated households participating in neither side of the rental market. The estimates indicate that male-headed households are 6.71 percentage points more likely to participate as tenants than female-headed households. Own-landholding has a negative and statistically significant effect on the area rented in, indicating that households with larger land endowments have less incentive to expand cultivation through rental arrangements. Land certification also negatively affects the likelihood of tenant participation, suggesting that improved tenure security may encourage households to concentrate on cultivating their own land rather than expanding through rental markets. Farm characteristics like plot distance increases the likelihood of becoming a tenant, whereas better plot quality reduces the area rented in.The findings demonstrate that land rental market participation is influenced not only by land availability but also by household resource endowments and farm characteristics. Policies promoting affordable credit, improved agricultural services, secure land rights, and transparent rental arrangements could strengthen land-market efficiency, enhance agricultural productivity, and improve rural livelihoods.
References
Adal, Y. (1997). Rural land holding readjustment in West Gojjam, Amhara region. Ethiopian Journal of Development Research, 19(2).
Amare, Y. (1995). Land distribution and its implications for peasant differentiation in Wogda, Northern Shewa. Ethiopian Journal of Development Research, 17(1), 25–37.
Annys, S., Vanden Bempt, T., Negash, E., De Sloover, L., Ghekiere, R., Haegeman, K., ... & Nyssen, J. (2021). Tigray: atlas of the humanitarian situation. Journal of Maps, 1-97.
Awasthi, M. K. (2009). Dynamics and resource use efficiency of agricultural land sales and rental market in India. Land use policy, 26(3), 736-743.
Burke, W. J. (2009). Fitting and interpreting Cragg's tobit alternative using Stata. Stata Journal, 9(4), 584.
Chamberlin, J., & Ricker-Gilbert, J. (2016). Participation in rural land rental markets in Sub-Saharan Africa: Who benefits and by how much? Evidence from Malawi and Zambia. American Journal of Agricultural Economics, 98(5), 1507–1528. https://doi.org/10.1093/ajae/aaw021
Cragg 1971:
CSA (Central Statistical Authority). (2002). Ethiopian agricultural sample enumeration: Statistical report on farm management practices, livestock and farm implements. Addis Ababa, Ethiopia: CSA.
CSA (Central Statistical Authority). (2007). The 2007 population and housing census of Ethiopia. National statistical abstract. Addis Ababa: CSA.
Carletto, G., Covarrubias, K., Davis, B., Krausova, M., Stamoulis, K. G., Winters, P. C., & Zezza, A. (2007). Rural income generating activities in developing countries: re-assessing the evidence. eJADE: electronic Journal of Agricultural and Development Economics, 4(1), 146-193.
Deininger, K., Ali, D.A., Alemu, T., (2011) Impacts of land certification on tenure security, investment, and land market participation: Evidence from Ethiopia. Land Economics. 87(2), 312–334
Feng, S., &Heerink, N. (2008). Are farm household’s land renting and migration decisions inter-related in Rural China? NJAS-4. https://doi.org/10.1016/S1573-5214(08)80025-5
FDRE (1995): Federal Democratic Republic of Ethiopia Constitution , Addis Ababa. Ethiopia.
Gebregziabher, G., & Holden, S. T. (2011). Distress rentals and the land rental market as a safety net: Contract choice evidence from Tigray, Ethiopia. Agricultural Economics, 42, 45–60. https://doi.org/10.1111/j.1574-0862.2011.00551.x
Gebreselassie, S. (2005). Recent experiences in land rental markets in Ethiopia: Impact on equity, efficiency and poverty. Paper presented at the symposium on land and sustainable development in Ethiopia. Addis Ababa, Ethiopia, 5 August 2005, EEA and AESE.
Gebru, M., Holden, S. T., & Tilahun, M. (2019). Tenants’ land access in the rental market: evidence from northern Ethiopia. Agricultural Economics, 50(3), 291-302.
Haile-Gabriel, A. (2000). Development strategies and Ethiopian peasantry: supply response and rural differentiation (PhD Thesis). Institute of Social Studies, The Hague, The Netherlands.
Hayami, Y., & Kikuchi, M. (1982). Asian village economy at the crossroad. Baltimore: Johns Hopkins University Press.
Holden, S. T., Deininger, K., &Ghebru, H. (2007). Impact of land certification on land rental market participation in Tigray region, Northern Ethiopia. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1019996
Holden, S.T., Deininger, K., Ghebru, H., (2009) Impacts of low-cost land certification on investment and productivity. American Journal of Agricultural Economics . 91, 359–373
Hoken, H. (2012). Development of land rental market and its effect on household farming in rural China: an empirical study in Zhejiang Province. IDE Discussion Paper, 323.
Jin, S., & Jayne, T. S. (2013). Land rental markets in Kenya: Implications for efficiency, equity, household income, and poverty. Land Economics, 89(2), 246–271. https://doi.org/10.3368/le.89.2.246
Mulat, D. (1999). Agricultural technology, economic viability and poverty alleviation in Ethiopia. Paper presented at the Agricultural Transformation Policy Workshop, Nairobi, Kenya, June 27–30, 1999.
Otsuka, K. (1993). Land tenure and rural poverty. In M.G. Quibria (Ed.), Rural Poverty in Asia—Policy Issues and Policy Options. Hong Kong: Oxford University Press.
Otsuka, K., & Hayami, Y. (1988). Theories of share tenancy: a critical survey. Economic Development and Cultural Change, 37, 31–68.
Place, F., & Hazell, P. (1993). Productivity effects of indigenous land tenure systems in Sub-Saharan Africa. American Journal of Agricultural Economics, 75, 10–19.
Rahmato, D. (1984). Agrarian reform in Ethiopia. Uppsala, Sweden: Scandinavian Institute of African Studies.
Teklu, T. (2003). Rural lands and evolving tenure arrangements in Ethiopia: issues, evidences and policies (Discussion paper 10). Addis Ababa, Ethiopia: Forum for Social Studies.
Tesfaye, T. (2004). Rural land, emerging rental land markets and public policy in Ethiopia. USA: African Development Bank.
Tesfaye, T., & Adugna, L. (2004). Factors affecting entry and intensity in informal rental land markets in southern Ethiopian highlands. International Agricultural Economics, 30(2), 45–53.
Teshome, A. (2006). Agriculture, growth and poverty reduction in Ethiopia: policy processes around the new PRSP (PASDEP). In a paper for the Future Agricultures Consortium Workshop, Institute of Development Studies, University of Sussex, UK (pp. 20-22).
Vranken, L., & Swinnen, J. (2006). Land rental markets in transition: Theory and evidence from Hungary. World Development, 34(3), 481-500.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 International Journal of Business and Development
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.